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Under terms of the legislation,
Senate
Bill 600, the state's minimum wage will rise in two installments,
starting Jan. 1, 2004, when people 18 years of age and older will be
paid an hourly rate of not less than $5.50, up from the current
$5.15. Beginning Jan. 1, 2005, the rate will be $6.50 per hour. It
has been estimated that the raise will directly benefit 450,000
Illinois workers, or about 6 percent of the state's work force, half
of whom earn the current minimum wage.
"When the minimum wage was established
by President Roosevelt in 1938, it was about ensuring that working
people could afford to support themselves and their families. Maybe
you wouldn't get rich, but you'd get by," Blagojevich said in
signing the minimum wage bill at Manny's Coffee Shop & Deli in
Chicago. "Today, Americans are still working a fair day, but many
are no longer receiving fair pay."
As the governor has repeatedly pointed
out in advocating for higher wages, it is nearly impossible for a
minimum-wage earner to meet the basic family household expenses --
such as putting food on the table, buying shoes for the children, or
paying rent and utility bills -- on $10,712 a year, which is the
current annual salary of a person working 40 hours a week, 52 weeks
a year, at $5.15 an hour.
The current minimum-wage annual salary
represents only 55 percent of the 2002 federal poverty level for a
family of four ($18,244) and also is shy of the threshold for a
single parent with one child ($12,400). The increase to $6.50 an
hour will result in a pre-tax gross income of $13,520, an additional
$2,808.
According to an economic impact study
completed in 2003 by the Center for Urban Economic Development of
the University of Illinois at Chicago, the failure to adjust the
minimum wage for inflation has allowed real hourly wages to steadily
erode to a nearly all-time low level. Today's minimum wage buys
about a third less than it did a quarter century ago. If the minimum
wage had kept pace with increased worker productivity, it would be
nearly $14 an hour today.
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While many believe the higher minimum
wage mainly impacts student workers, nearly 70 percent are actually
20 years of age or older (average age is 31), and nearly one-third
are heads of households.
Besides building more of an economic
independence for the lowest wage earners, the UIC study also
predicted the higher wages could trigger as much as $900 million in
additional sales for Illinois businesses.
"Workers who are paid well are more
loyal to their employers and more productive. And, because nearly
half a million of our state's workers will have more money in their
pockets to spend, businesses will benefit from higher sales," the
governor said. "A better minimum wage is good for business, and it's
good for working families; it's the right thing to do for our
state."
Illinois joins 11 other states and the
District of Columbia that have a minimum wage higher than the
federal standard, which has not been increased since 1997. The other
states are Alaska, California, Connecticut, Delaware, Hawaii, Maine,
Massachusetts, Oregon, Rhode Island, Vermont and Washington.
Senate Bill
600 was sponsored by state Sens. Kimberly Lightford, D-Maywood; Iris
Martinez, D-Chicago; Carol Ronen, D-Chicago; Donne Trotter,
D-Chicago; and Martin Sandoval, D-Chicago; and in the House by
Speaker Michael Madigan, D-Chicago; state Reps. Barbara Flynn
Currie, D-Chicago; William Davis, D-Hazel Crest; Edward Acevedo,
D-Chicago; and Harry Osterman, D-Chicago.
[Illinois
Government News Network
press release]
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